HP to throw $100 million on soothing retailers' pain caused by unsold TouchPads

With the HP TouchPad selling considerably worse than anyone at the company would have ever imagined, one might wonder what would retail outlets do with all the leftover units taking up precious space in their warehouses. Well, the manufacturer shed some light on the matter yesterday and stated that $100 million will be reimbursed to retailers for their unsold HP TouchPad inventory.

The announcement was made during the company's Q3 earnings report soon after Léo Apotheker, chief executive officer of Hewlett-Packard Corporation, dropped the bomb by stating that his company was through with webOS tablets and smartphones. Now, assuming that HP was charging about $400 per unit on average, we can estimate that roughly 250,000 TouchPads are still collecting dust around retailer warehouses nationwide, which lines up with the rumor that Best Buy still has nearly 245,000 of them. Of course, these numbers are nothing but a guess and the manufacturer might have shipped the tablet at a much lower price in order to boost sales and gain market share.

HP has been persistently trying to find a way to increase its profits, which have been dropping steadily over the past year, but its low operating margins have left the company struggling against the competition. Initial hopes for the webOS platform and the devices that it would power, the HP TouchPad included, were pretty high as they were viewed as more or less as a lifeline for HP. However, due to poor marketing and low developer support, webOS simply failed to catch up with the market.

With webOS awaiting its uncertain fate, HP might consider dropping TouchPad prices even further, possibly even going below its production cost after a while. As we reported not long ago, the tablet now bears a permanent $400 price tag for its 16-gig Wi-Fi-only model and $500 for the 32-gig one at the manufacturer official online store.

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I think if HP had launched the TouchPad at $399 it would sell much more. Starting it at the same price point as the iPad was a mistake. They didn't really give people a good reason to buy a TouchPad over an iPad. Pricing isn't everything but its a good enough reason for someone to overlook the competition.

3.J miller (unregistered)

Besides the price point being close to Ipad. The real issue with HP touchpad is the complete absence or rather zero visibility WebOS in the market since it bought it from Palm. Unlike Andriod which is open & taunted to challenge Apple's IOS even before mass adoption. HP WebOS was simply not in anyone radar. HP should have come out with a beta touchpad quickly with WebOS & provide testing for free in the 1st place & have use feedback & focus group at the very least. This not only allow feedback & also propel the development to to focus on the real world requirements. Eco-system is key here & HP now having to play catchup...I wish them good luck..

HP better do right by these retailers. How do they move future products if they burn bridges by sticking it to electronic stores across the country? This is going to be a hard failure to bounce back from for HP, especially considering the tougher competition for PCs, laptops, and notebooks.

This must be heartbreaking for true WeBOS fans. Once I move on, there will be plenty I will miss about my Pre Plus. What a monumental waste of a great OS.

6.rocket (unregistered)

This is a sad option to take. Apple is to blame cause they dominate the tablet world. Its funny, if WebOs was the first option available to the world I would bet my bottom dollar that they would still be the dominate alpha Tablet. Its not a bad platform at all, yeah its different but so is Android. They need to take a step back and ReRevamp things. My opinion only. I do wish VZW carried this though.

9.HLS (unregistered)

if the 16GB dropped to 199$ I may consider buying one. i am just glad i canceled my order at 499$ I was wondering why they were so aggressive in trying to get me to not cancel. no one wants one lol What was HP thinking about making such a bulky item?? and apple ipad is not much more expensive

HP better do right by the poor saps like me who actually bought one and was actually writing bug reports to help fix it's multitude of issues. f**ked out of $600 dollars and now there's a fire sale. Thx HP, thx for taking care of those retailers, forget about the consumers you just royally f*cked over. Thx a lot. I even purchased it to begin starting app dev. Needless to say, will never purchase or recommend an HP product to anybody I know again. Lost a customer for life. HP can go out of business and die tomorrow and I would find solace in that.

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